ISLAMABAD: Pakistan’s military is taking a key role in the development of one of the world’s biggest untapped copper and gold deposits, which is currently stalled by a multi-billion dollar legal wrangle with foreign mining firms, multiple sources familiar with the situation said.
The Reko Diq mine has become a test case for Prime Minister Imran Khan’s ability to attract serious foreign investment to Pakistan as it struggles to stave off an economic crisis that has forced it to seek an International Monetary Fund bailout.
Ten current and former provincial and federal government officials and mining sources familiar with the project in the Baluchistan region say the military has become the most important voice on the future of Reko Diq, which it sees as a strategic national asset.
The military will not only be in a position to decide which investors develop the deposit, but an army-controlled engineering firm, Frontier Works Organization (FWO), is positioning itself to be a member of any consortium involved, these people said.
“This has been taken over by GHQ,” said a senior Baluchistan government official, referring to the Pakistan army’s General Headquarters in the garrison city of Rawalpindi.
In a statement in response to Reuters’ questions about its role in Reko Diq, the military spokesman’s office said: “(The military) may only participate in government’s plan of development of Reko Diq, as per national requirements.”
But it acknowledged that FWO, best known for building roads through Pakistan’s rugged and lawless border regions, has developed “substantial” mining capability in recent years and would be interested in taking a role in the project.
“If an opportunity arises of participating in developing Reko Diq, FWO may work at par with other competitors (or) companies provided the project is financially viable (or) suitable,” the statement said. When asked, a spokesman declined to elaborate on the statement.
Pakistan’s Information Minister Fawad Chaudhry said civilian authorities in the insurgency-hit southwestern province of Baluchistan were in charge of Reko Diq and, along with Khan, would take a decision, but added that the military “and all other stakeholders are obviously important players.”
FWO referred questions to the military spokesman’s office. Khan’s spokesman Iftikhar Durrani said Baluchistan province was in charge of Reko Diq, and referred questions to the provincial government and the military spokesman’s office.
The manoeuvring behind the project shows how the military, which has historically dictated Pakistan’s security and foreign policy, is leveraging its sway over the civilian government at federal and provincial level to carve a growing role in the nation’s business affairs.
“The military has taken a front seat,” said Ayesha Siddiqa, author of the book “Military Inc.,” which analyzes the army’s business interests and influence in Pakistan.
“They’ve understood that the economy is important for having a strong military,” she said. “Control of the economy also gives the military a handle over expanding their business interests.”
TALKS
Buried at the foot of an extinct volcano near the frontier with Iran and Afghanistan, the mine’s development has long been delayed by a dispute with previous investors in the project, Canada’s Barrick Gold and Chile’s Antofagasta.
The government is urgently trying to settle the dispute as a World Bank arbitration tribunal, which ruled against Pakistan in 2017, is in the next few months expected to announce how much in damages the country must pay to the foreign firms, who are claiming more than $11 billion.
The dispute relates to the withholding of a mining lease.
Islamabad is also trying to find new partners to invest in the project.
But any new investors will need the blessing of Pakistan’s military, according to government officials and mining sources.
State-run companies from resource-hungry China have long coveted Reko Diq and more recently Saudi Arabia has shown interest, according to Pakistani officials.
Some Western diplomats say the Reko Diq dispute has been a significant foreign investment deterrent, with international businesses unnerved at how Pakistan dealt with the companies that had pledged to invest $3.3 billion to develop the country’s then-biggest mining project.
Barrick Gold and Antofagasta, whose joint venture Tethyan Copper Company (TCC) discovered vast mineral wealth in Reko Diq, say they had invested more than $220 million by the time the Baluchistan government, in 2011, unexpectedly refused to grant them the critical mining lease needed to keep operating.
Pakistan argued its move was legitimate because TCC’s feasibility study was incomplete and the country’s Supreme Court voided the deal in 2013. But in 2017 the World Bank’s International Center for Settlement of Investment Disputes (ICSID) ruled against Pakistan.
TCC did not respond to requests for comment and Antofagasta and Barrick Gold both declined to comment. Reuters could not determine whether either company would be willing to return to the project.
FOREIGN INVESTORS
The last serious attempt at settling the Reko Diq case was scuppered in 2016 by the military, which vetoed paying hundreds of millions of dollars to TCC, according to a senior Baluchistan official and two former senior officials in Islamabad.
But the military has since changed its stance and is more open to a settlement with TCC, according to a lawmaker close to the military and a source close to Prime Minister Khan. The military was also involved in appointing Pakistan’s current legal team.
In response to a Reuters question about blocking the previous settlement effort, the military said: “Let’s see how the case progresses.” It did not elaborate or comment on whether it was playing any role in the latest negotiations.
Some mining experts say a likely solution would be for a new investment consortium to pay the settlement fee on behalf of cash-strapped Pakistan in exchange for future royalty fees or mining rights.
Information Minister Chaudhry said Pakistan was engaged in negotiations with “both” the current investors about a settlement and also potential new investors, with interest coming from the Middle East and Europe. He declined to name the potential investors.
Pakistani Finance Minister Asad Umar said in October that Saudi Arabia has inquired about investing in Reko Diq and another government official confirmed talks were ongoing.
Saudi Arabia did not respond to a Reuters request for comment on Reko Diq. During Crown Prince bin Salman’s visit to Pakistan last month, the kingdom pledged to invest $2 billion in mineral development projects, though the provisional agreements were vague and did not mention any specific projects.
China’s state-owned miner China Metallurgical Group Corporation (MCC), which operates the Saindak copper and gold mine close to Reko Diq, has been eyeing the bigger deposit for more than a decade, according to mining and MCC officials.
A few years ago Chinese state giant Norinco also made an approach, according to two sources familiar with Norinco’s offer.
MCC and Norinco did not respond to requests for comment.
When a mining company approached former general Abdul Quadir Baloch about Reko Diq around 2016, when he was federal minister for the frontier regions, he took their proposal not only to then-premier Nawaz Sharif, but also to the army chief.
“The military has to give a (security) guarantee to any company coming in to explore or exploit this project, so they are a stakeholder,” said Baloch.
The military declined to comment on Baloch’s assertions. Sharif, who has since been jailed on corruption charges, could not be reached for comment.
The army-run FWO does not have the funds or the expertise to develop the Reko Diq project, which boasts 5.9 billion tons of ore. But it could be part of a consortium alongside global miners who have the know-how to mine such a gargantuan deposit.
The military’s role in developing natural resources in Baluchistan also carries risks, however, analysts say.
Indigenous Baloch people view outsiders with suspicion, and their anger about Islamabad exploiting the province’s vast natural resources has been one of the key themes fueling a separatist insurgency that began around 2004.
Pakistan military eyes key role developing giant copper and gold mine
Pakistan military eyes key role developing giant copper and gold mine
- Buried at the foot of an extinct volcano near the frontier with Iran and Afghanistan, Reko Diq has world’s biggest untapped copper and gold deposits
- The project boasts 5.9 billion tons of ore inviting foreign investors
Trying civilians in military courts lacks transparency, UK government says after verdicts announced
- 25 civilians sentenced by a Pakistani military court to periods of two to 10 years of “rigorous imprisonment” on Saturday
- Case relates to accusations thousands of Khan supporters stormed military installations, torched general’s house in 2023
ISLAMABAD: The United Kingdom said on Monday trying civilians in military courts lacked transparency and undermined the right to a fair trial, days after 25 civilians were sentenced by a Pakistani military court to periods of two to 10 years of “rigorous imprisonment” in connection with attacks on military facilities in 2023.
The Dec. 21 ruling underscores concerns among supporters of jailed former prime minister Imran Khan that military courts are going to play a bigger role in cases involving the 72-year-old cricketer-turned politician, who is facing multiple charges including allegedly inciting attacks against the armed forces. He is currently facing these charges in a civilian court, but his Pakistan Tehreek-e-Insaf (PTI) party fears he may also be taken to military trial.
The government says thousands of Khan supporters stormed military installations and torched a general’s house on May 9, 2023, among other violence, to protest against the former PM’s arrest by paramilitary soldiers that day in a land graft case. At least eight people were killed in the violence.
“While the UK respects Pakistan’s sovereignty over its own legal proceedings, trying civilians in military courts lacks transparency, independent scrutiny and undermines the right to a fair trial,” a Foreign, Commonwealth and Development Office spokesperson, said. “We call on the Government of Pakistan to uphold its obligations under the International Covenant on Civil and Political Rights.”
The Pakistan government and military have not yet responded to the UK statement, which follows one by the European Union, saying the military court verdicts were “inconsistent” with Pakistan’s international obligations.
On Saturday, while announcing the military court verdicts, the army’s media wing said the sentences were an “important milestone in dispensation of justice to the nation.”
“It is also a stark reminder to all those who are exploited by the vested interests and fall prey to their political propaganda and intoxicating lies, to never take law in own hands,” the army said in a statement.
Others charged over the violence were being tried in anti-terrorism courts but justice would only be fully served “once the mastermind and planners ... are punished as per the Constitution and laws of the land,” the military said, in what was widely seen as a veiled reference to Khan.
The ruling comes days after Khan was indicted by an anti-terrorism court on charges of inciting attacks against the military. An army general who served under him as his spy chief, Faiz Hamid, is facing a military investigation on the same charges.
Pakistan’s Supreme Court last week allowed military courts to announce verdicts in concluded trials of nearly 85 supporters of Khan on charges of attacking army installations. However, it made such verdicts conditional on the outcome of appeals against the jurisdiction of military courts over civilians.
The court last year provisionally allowed military courts to try civilians.
With inputs from Reuters
IFC backs Pakistani firm, UAE subsidiary to set up tire manufacturing unit in Sindh
- IFC and group of local banks will provide up to $50.2 million to Armstrong ZE to increase local production of tires
- The project is expected to create over 1800 jobs and bolster local manufacturing and supply chains, IFC said
ISLAMABAD: The International Finance Corporation (IFC) and a consortium of Pakistani banks will provide up to $50.2 million-equivalent in financing to support Pakistan’s Armstrong ZE Pvt. Ltd. and its UAE subsidiary Zafco Group Holding in developing a greenfield tire manufacturing facility in the Sindh province, IFC said on Monday.
The number of registered vehicles in Pakistan has grown steadily over the last decade, reaching approximately 30 million vehicles in 2023, including 23 million two-wheelers. However, local tire manufacturing remains constrained due to a lack of technical expertise and technology and a substantial informal market, making the country heavily dependent on imports.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector, working in more than 100 countries. It has invested approximately $13 billion in Pakistan since 1956, supporting diverse sectors such as renewable energy, financial inclusion, infrastructure development, agribusiness, manufacturing, housing, health care, and trade, among others.
“Armstrong ZE is deeply honored to have earned the trust and support of IFC and our partner banks, HBL, Meezan Bank, Bank Alfalah and Habib Metropolitan Bank. Their investment in this transformative project is not just a financial endorsement but also a strong vote of confidence in our vision, capabilities, and potential to shape the future of tire manufacturing,” Azim Yusufzai, the chairman of Armstrong ZE, said in a statement released by IFC.
“Together, we aim to foster innovation, create employment opportunities, and contribute to sustainable development in our communities and beyond. This collaboration marks a monumental step forward in advancing our mission to deliver world-class, sustainable, and innovative tire solutions to the Pakistani market.”
The financing comprises a $25 million loan from IFC alongside an up to $25.2 million equivalent investment in Pakistani rupees from local banks. The project is expected to create over 1,800 direct and indirect jobs and help increase the competitiveness of the tire sector through technology and know-how transfers.
The project will utilize the company’s long-standing experience in the tire industry, through its UAE-based company, Zafco Group Holding, which operates as a global importer and exporter of tires, batteries, and lubricants, with a presence in over 85 countries, as well as Zafar Enterprises, a leading tire distributor in Pakistan.
IFC will also be supporting Armstrong through its Responsible Investing Support in Emerging Economies (RISE) advisory program, which will strengthen Armstrong’s climate risk management, resource efficiency, and environmental and social processes.
“IFC is committed to improving Pakistan’s value-added manufacturing capacity by partnering with strong companies that can scale up production,” said Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East, Pakistan, and Afghanistan.
“This investment exemplifies this commitment and will help improve consumer access to tires while spurring the economy through job creation, increased productivity, and reduced reliance on imports.”
IFC said the project will introduce a locally manufactured international brand to Pakistan, which will improve consumer access to quality, affordable tires, while strengthening local supply chains, creating jobs and boosting private sector-led growth.
Armstrong ZE Pvt. Ltd. is a wholly owned company established by the Pakistan-origin Hussain and Yusufzai families who have over fifty years of experience in the tire business with operations in more than eighty-five countries. The families also own, Zafar Enterprises, a leading tire distribution company in Pakistan, and UAE based Zafco Group Holding, a global importer and exporter of tires, batteries, and lubricants, with a presence in over 85 countries.
Senate convenes parliament session to discuss UAE visa restrictions, welfare of overseas Pakistanis
- Session held after months of widespread media reports of a decline in UAE visas for Pakistanis
- Last month, Pakistan foreign office said it did not subscribe to “impression” of ban on UAE visas
ISLAMABAD: The Senate Standing Committee on Overseas Pakistanis and Human Resource Development on Monday convened a session at the Parliament House to deliberate on critical issues, “including the UAE’s unofficial visa restrictions and the welfare of overseas Pakistanis,” state-run APP news agency reported.
The session was held after months of widespread media reporting on a decline in UAE visas for Pakistanis and a decrease in overall overseas employment for nationals of Pakistan, allegedly due to their lack of respect for local laws and customs and for participating in political activities and sloganeering while abroad.
Last week, Prime Minister Shehbaz Sharif thanked the UAE for taking steps to streamline visas for Pakistanis.
“Senator Zeeshan Khanzada [chair of the session] emphasized the urgency of addressing lingering visa concerns, noting public frustration over unresolved issues,” APP reported after the meeting.
“Khanzada pointed out discrepancies in visa processing despite applicants fulfilling all requirements and stressed the importance of keeping the public informed through compliance updates and timelines,” the state agency added.
Dr. Arshad Mahmood, secretary of the ministry of overseas Pakistanis, clarified that the restrictions “were not absolute, particularly in Dubai, where skilled labor remains unaffected.”
“He acknowledged a recent decline in the demand for unskilled labor and highlighted the need to prioritize skilled workforce migration. He added that approximately 700,000 workers have been sent abroad this year,” APP said.
Committee members also discussed establishing dedicated immigration counters at international airports for overseas Pakistanis and facilitation for individuals whose passports had been confiscated, preventing their return to Pakistan, particularly those released from jail after falling short on visa requirements.
Last week, Hamad Obaid Ibrahim Salem Al-Zaabi, the ambassador of the UAE to Pakistan, called on Deputy Prime Minister Ishaq Dar and briefed him on steps being taken to streamline visas for Pakistanis. Previously, the foreign office has repeatedly said Islamabad did not subscribe to the “impression” that there was a ban on UAE visas for Pakistani nationals.
“If there are any issues that arise with respect to issuance of visas and stay of Pakistani nationals in the UAE, that are important agenda items between Pakistan and the UAE and we continue to discuss them,” the foreign office spokeswoman told reporters last month.
Days-long protest sit-in in Pakistan’s Gwadar continues over curbs on Iran border trade
- Locals in coastal town have traditionally used boats to travel into Iran to bring back oil and food items
- In August, government introduced a token system with only registered boats allowed to cross over
QUETTA: A protest sit-in in the southwestern Pakistani port city of Gwadar entered its 10th day on Monday, with participants calling for free trade with Iran via land and sea borders as well as uninterrupted electricity supply and access to clean drinking water.
Gwadar is a coastal town in Pakistan’s impoverished Balochistan province where China is developing a deep-sea port. Despite the largescale development work, residents of the town have for years complained of a lack of employment opportunities and basic facilities like clean drinking water and electricity.
Pakistan shares an 904-kilometer-long border with Iran via land and sea, which is used for informal trade between the two countries. Formal trade between Pakistan and Iran has been nominal due to US sanctions on Tehran, but the area is dominated by informal trade of Iranian oil, food items and liquefied petroleum gas (LPG), transported through various border crossings in the Makran and Rakhshan divisions.
District Gwadar shares a sea border with Iran while Balochistan’s Kech and Panjgur districts share a land border. In the past, locals in Gwadar used boats to travel into Iran to bring home Iranian oil and food items. They crossed over into the neighboring country after showing their Pakistani national ID cards (CNICs).
In August this year, authorities in Gwadar introduced a token system under which only registered boats, around 600, can daily cross into Iran through the Kantani Hor sea route. Locals say the new system has led to unemployment in the district as many can’t afford the tokens, which can cost up to Rs60,000 $215.
“We have been protesting for the last ten days because our people have lost their jobs since the government announced this new token system,” Houth Abdul Ghafoor, a local politician who has been leading the All-Parties Alliance protest since Dec. 13, told Arab News, describing the system as “official bribery.”
“More than three million people in Makran division are linked with border trade with Iran because we don’t have industries and other employment sources. The border restrictions are causing food and oil shortage in the coastal city.”
Jawad Ahmed Zehri, the Gwadar assistant commissioner, said the government had formalized border trade with Iran by registering boats so that all traders could benefit equally.
“Small traders are now directly benefitting from this token system as influential traders previously prevented smaller businessmen from crossing through the border,” Zehri told Arab News. “Now everyone can travel on his allotted number.”
Asked about talks between the administration and protesters, Zehri said the government would not engage with those pressurizing the government to abolish the token system.
The participants of the Gwadar sit-in said they are also protesting power and water shortages in the port city.
“We demand provision of basic facilities like education, water, electricity and job opportunities,” Maulana Hidayat-ur-Rehman, a provincial lawmaker from Gwadar, said.
Gwadar has witnessed regular days-long protests in recent years against the lack of basic amenities and alleged violations of human rights and extrajudicial killings by security agencies, who deny the charge.
Separatists have been waging a decades-long insurgency in Balochistan, accusing the government and army of exploiting the impoverished province’s mineral wealth, accusations both reject.
Peace talks to continue in Pakistani district wracked by sectarian feuding as two more killed
- Clashes between Sunni and Shia tribes have killed over 130 people in Kurram since last month
- Violence has triggered road closures, disrupting access to medicine, food, fuel, education, work
PESHAWAR: A government-backed council of tribal elders leading peace talks in a Pakistani district where at least 136 people have been killed since last month in sectarian clashes will resume meetings in two days and expects to sign a “durable” peace agreement, a government official said on Monday.
Kurram, a tribal district of around 600,000 in Khyber Pakhtunkhwa province where federal and provincial authorities have traditionally exerted limited control, has frequently experienced violence between its Sunni and Shia Muslim communities over land and power. Travelers to and from the town ride in convoys escorted by security officials.
The latest feuding started on Nov. 21 when gunmen ambushed a vehicle convoy and killed 52 people, mostly Shias. Nobody claimed responsibility for the assault, which triggered road closures and other measures that have disrupted people’s access to medicine, food, fuel, education and work.
Earlier this month, the provincial government of the Pakistan Tehreek-e-Insaf party formed a ‘grand jirga’ of political and tribal heavyweights to convince rival tribes to shun violence.
“The jirga will resume meetings after two days and is expected to sign a durable peace agreement to the dispute,” Khyber Pakhtunkhwa (KP) government spokesman Muhammad Ali Saif said in a statement, which came after two Shias were killed in the Ochat area of Kurram on Sunday night.
“The two persons were coming to their villages but on the main road unidentified men shot them dead at around 8pm,” Kurram police spokesman Riaz Khan told Arab News on Monday.
“One of the victims was from Alam Sher village and the other was from Zerran, Parachinar.”
Khan said at least 136 people had been killed in the violence since last month. If you added those who had died due to lack of access to hospitals and medicines following the road closures, the number reached at least 200, the police officer said.
Last week, Saif said authorities had decided to dismantle private bunkers, observation posts used in the fighting by both sides, and given a deadline of Feb. 1 for tribesmen in Kurram to handover heavy weapons. Local tribesmen have so far reportedly refused to surrender their weapons, citing concerns about their safety.
A tribal elder who is part of the jirga, however, said most tribes had agreed to the council’s recommendations.
“The jirga faces no big hurdles because both the sides have expressed willingness to abide by the jirga decisions, including removal of bunkers and surrendering of heavy weapons,” jorga member Muneer Bangash told Arab News on Monday.
“Once there are no heavy weapons, I’m sure there will be no mass killings at the scale that we have recently witnessed.”
He said both the sides wanted “communal coexistence and harmony” and realized that the decades-old clash had only brought destruction.
“We will give good news very soon. Half of the threat will be gone once the heavy weapons are collected. Peace will gradually take root,” Bangash added.
Meanwhile, the KP government has launched a helicopter service to evacuate people and transport aid and medicines to Kurran as a major highway connecting Kurram’s main city of Parachinar to the provincial capital of Peshawar has been blocked since last month, triggering a humanitarian crisis with reports of starvation, lack of medicine and oxygen shortages.
On Sunday, two flights evacuated 27 individuals and 16 government staffers and jirga members, according to KP chief minister’s office. Since last week, over 180 people, including women, children and patients, have been transported via helicopter, with priority given to those in need of urgent medical attention.
In a meeting on Monday, the KP cabinet decided to establish a special police force to secure the Peshawar-Parachinar road, for which 399 people would be recruited.
Shia Muslims dominate parts of Kurram, although they are a minority in the rest of the country. The area has a history of sectarian conflict, with militant groups like the Pakistani Taliban and Daesh also previously targeting the minority group.
